The Sir Robert Bond Papers

[Reprinted, with permission, from NOIA News, August/September 2006]

In the early months of 2006, the phrase "use it or lose it" received a great deal of attention in Newfoundland and Labrador’s offshore oil and gas industry. The idea that offshore licences should be relinquished if the holders have not worked them for a given period has been debated, off and on, over the past three decades. More recently, "fallow acreage" or "fallow field" regulations were raised during the consultation on Newfoundland and Labrador’s soon-to-be-finalized energy plan: stakeholders on all sides of the equation weighed in on the potential impacts of changing land tenure regulations. However, the concept shifted rapidly from theoretical to practical when it emerged in the public arena after Hebron negotiations were suspended.

From the word-smithy: The word fallow was originally a farming term, applied to land that was left unseeded for a season or more to allow it to build up nutrients and regain productivity. It is now applied to a variety of resources or markets that are inactive or undeveloped but potentially useful.

The Government of Newfoundland and Labrador stated in its energy plan discussion paper Paper (released November 2005) that the consultation process would address, among other things, land tenure issues - including the apparent use of the Significant Discovery Licence to "warehouse" acreage with at least a show of hydrocarbons in virtual perpetuity. This discussion was intended to explore alternatives to the current system, with the ultimate objective of encouraging more timely petroleum development.

In the Newfoundland and Labrador offshore jurisdiction, once a significant discovery licence has been issued, it continues to be in force as long as the associated declaration is in force. The Canada Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) can, under defined circumstances predominantly related to the need for national security of supply, order that a well be drilled on a portion of a significant discovery area [SDA] (Section 75 of the Canada-Newfoundland Atlantic Accord Implementation Act). Additionally, under Section 148 of the same legislation the CNLOPB can order commencement of production, when the chief conservation officer is of the opinion that the capability exists to do so and that not doing so will in some way allow the asset to waste. However, this instrument has been criticized as difficult to apply under an argument of commercial wastage, unnecessarily blunt and potentially counterproductive. Most importantly, an attempt to encourage activity in this way would in all probability heighten this jurisdiction’s current reputation as excessively proscriptive.

The good news is that some of the issues inherent in the current licensing system are being addressed, and more responsive regulatory instruments are being developed.

The 2006 Newfoundland and Labrador call for bids, for example, contained provisions for rentals during the term of an exploration licence [EL] awarded in that bid process and during the term of any resulting significant discovery licence [SDL]. The rates escalate, depending on how long the licence is held, however, rental paid can be credited to allowable expenditure.

During the province’s energy plan consultation, another SDL-related issue was raised by several stakeholders, including NOIA. Phonse Fagan, a St. John’s-based petroleum consultant, stated the case succinctly: “Ultimately the oil company should be required to prove that oil/gas can flow to the surface at rates that have some potential to be economic before a significant discovery licence is issued.” Under the current system, non-commercial discoveries can be held in perpetuity without a requirement for further testing to fully explore their potential. As a result, Newfoundland and Labrador is home to twelve significant discoveries containing fewer than 40 million barrels of oil and eight containing fewer than 0.5 trillion cubic feet of gas – well below the commercial threshold for this environment today, much less two decades ago when they were awarded.

The core licensing objectives - driving development without hindering competitiveness, identifying the full potential of a discovery and encouraging commitment to development - must all be addressed in order to establish a regime that is both competitive and sustainable. To a large degree, these issues have been addressed by the United Kingdom’s Fallow Initiative, which has received international attention for its positive affect on exploration rates on the United Kingdom continental shelf.

The UK’s Department of Trade and Industry (DTI) initiated the fallow acreage process in 2002 as a way to drive activity in inactive older licences. The oldest inactive licences had an initial term of 6 years with a second term lasting as long as 40 years and often covering multiple blocks. Under these terms, licences issued in the UK’s first offshore call for bids do not expire until 2010.

It is important to understand that although retroactive, the application of fallow field legislation in the United Kingdom is a cooperative process. As part of Promote UK, a joint initiative of DTI and the United Kingdom Offshore Operators Association (UKOOA) designed to attract new entrants, the Fallow Initiative is supported by a range of tools enabling market awareness and access to information.

Initially, fallow blocks and discoveries are identified in discussion with the operator and other licensees. The process then classifies these areas as either Class A (blocks with a recent change of ownership or technical barrier) or Class B (blocks with an identified misalignment of interests). For Class B blocks, a formal invitation is issued to the licence holder for an activity report to take the block out of fallow. If there is no progress, the block is placed on the LIFT (Licence Information for Trading) Fallow Register. The Fallow Register has been set up to encourage companies already working in the North Sea, as well as new entrants, to approach these lands with fresh eyes and come forward with new ideas for exploration and appraisal.

Once the block has been on the Fallow Register for nine months, DTI will request a firm strategy for activity from the licence holder or from those with interest in the block. Fallow Discoveries follow a similar process. However, discoveries remain on the Fallow Register for a period of 18 months prior to a request for activity. After the requisite period on the Register, the block/discovery is relinquished and offered for sale in a subsequent licensing round. Operators must also release land information to potential buyers through the Digital Energy Atlas and Library (DEAL), which catalogues geological data related to the UK continental shelf.

As of January 2006, the Department of Trade and Industry and its partners in the PILOT initiative published a new list of fallow blocks and discoveries. This release has added 40 new fallow blocks and 23 new fallow discoveries to the list. Hannon Westwood, a UK upstream oil and gas consultancy, maintains that the direct pressure of the Fallow Initiative and a parallel marketing drive to attract new investment have together changed the ownership landscape of the UK continental shelf.

Hannon Westwood also found that the Fallow and Promote initiatives generate deals and spur drilling activity. More significantly, the consultant determined that Fallow Acreage wells traditionally outperform traditional farm-in wells, adding the highest level of reserves per well to the existing resource base.

It is generally accepted that land tenure regulations are an important factor in a jurisdiction’s overall competitiveness. However, these regulations must also serve the goals of the jurisdiction. Clearly, therefore, a balance must be struck between attracting investment and requiring timely action toward exploration and development. The UK may well serve as a useful model for cooperation between regulators and industry in the development and implementation of regulations that achieve both.

It is well with my soul

When peace, like a river, attendeth my way,
When sorrows like sea billows roll;
Whatever my lot, Thou has taught me to say,
It is well, it is well, with my soul.

Words: Horatio Spafford, 1873
Music: Philip Bliss, 1876

Some New Democrat supporters took offence at an earlier post, "Dipocrits".

One sent an e-mail, under a pseudonym and attacking me personally. Nice to see substance in a discussion.

Another posted to his own blog and started out by calling me a right-wing dweeb.

Again an argument of substance.

Let's make it clear: Canada's mission in Afghanistan includes suppressing the armed elements - Taliban, drug lords and anyone else - in order to create an environment where Afghans can peacefully determine their own future, for themselves. It always has.

Canada's mission includes reconstruction. It is an essential component of the NATO force approach and has been since Canadian troops first arrived in Afghanistan.

The moral and intellectual bankruptcy of those who would have our country withdraw from Afghanistan now is best displayed by arguments such as those put forward by La revue gauche among others. But beyond the ad hominem swipes and inaccurate information, there is simply nothing else in the post you will find by following that link.

If New Democrats can possibly offer something of substance as an alternative to Canada's current policy in Afghanistan, then let's engage in a discussion.

But if the best the New Democrats and others on the political left can come up with is a withdrawal of our soldiers who are there to establish the peaceful basis on which reconstruction and reconciliation can take place, then they are offering nothing - absolutely nothing - that deserves serious consideration. It would appear their philosophy is that when the going gets tough, Canada should go home and hector everyone else from the sidelines.

The accuracy of the earlier assessment is only confirmed by the personal attacks that resulted from it.

Newly-minted provincial New Democrat leader Lorraine Michael thinks Canadian soldiers should withdraw from Afghanistan.

She joined the overwhelming majority of her Dipper colleagues on the weekend in voting for an unceremonious retreat by Canadians from Afghanistan as soon as the flights can be booked.

Just not on Canjet.

And what of the people of Afghanistan?

Shag the wogs, the Dippers say implicitly.

And what of Canadian interests and values?

We are expressing Canadian Dipper values which always place anti-American tirades above everything else likely comes the reply. I mean God forbid we should do something in the world besides talk about the need for other people to do something.

And when the Taliban come back to power and make it a crime to teach girls and young women anything, including how to read?

or when women are beheaded or shot in a public spectacle for the alleged crime of adultery?

That sound you hear will be the wind whistling through the canyon of Dipper moral posturing.

Some of us remember the old hypocrisy very well as it rears its head once more.

If I had a rocket launcher, indeed.

Bloody Dipocrits.

A news report on a concert by English professional euphonium player Steven Mead.

Leave it to Danny Williams [left, meeting with reporters] to link a dispute with the federal government to the anniversary of one of the biggest franchises in entertainment history.

In the same week Star Trek fans marked the 40th anniversary of the first episode Danny Williams said:

"Now I find that disgusting, disgraceful and shameful, quite honestly, when a federal government will not stand behind a member of the federation, a province," Williams fumed. [Emphasis added]

That explains it all.

Newfoundland and Labrador is a member of the Federation. It all starts to make sense now.

Williams - or should we say The Boss - is just looking to get "A piece of the action."

My question is: If we are members of the Federation now, what planet is this guy from?

From the Canadian Press version of a scrum yesterday comes little more than another occasion for Premier Danny Williams to repeat his cute little sound bite about the Prime Minister being a big buddy of Big Oil.

That's really the only substance in the set of comments.

A pre-planned little quip that someone in the Premier's publicity department likely spent a bit of timing inventing.

Communications Lite.

More cuteness, less filling.

It's the kind of stuff you'd expect from Paris Hilton, say or the publicist for some other vacuous tabloid tarnisher who is famous for, well, being famous. It's the kind of mental flatulence politicians - even most Newfoundland politicians - aren't known for.

Nope, lonely turbot fingernails are decidedly rare in the political rhetoric of a place where verbal ability is a keen indicator of intellectual capacity. The real joke in the Nissan Bonavista spot is that they had to put in subtitles so the mainlanders could keep track of the fast talk and obvious mental dexterity of the salesman. Consider him a modern day version of the guy jumping up and down on the manhole cover on Yonge Street and yelling "87!".

but I digress.

Toward the end of the CP piece is this quote from the Premier on how things might have been better back in April had Stephen Harper been involved:

The reality is that if he [Prime Minister Stephen Harper] could actually reach
a deal with these companies himself and deal with a lot of these things,
(Hebron) would be back on the rails.

Every Premier of Newfoundland and Labrador since Confederation has feverishly worked to keep the federal government's hands off what areas of provincial jurisdiction. Brian Peckford waged political war on Ottawa for almost a decade over just such an issue and offshore oil and gas before he lost in court and then secured the historic Atlantic Accord (1985).

Heck, Danny Williams only a short while ago was strutting around talking about being masters of our ~~domain~~ destiny and boasting of going it alone.

So, under the powers wrestled from Ottawa by Peckford, Danny Williams was locked into a mano-a-mano set of negotiations with Big Oil. He was doing what he claims to do best: negotiate toughly with Big Oil and others like it.

But now, Danny Williams claims that, what? He isn't a Great Negotiator? He is incapable of going it alone? He needs his Big Brother to back him up?

The thing about the line quoted above is that it is true. But it is true if the "he" is Danny Williams and not Steve Harper.

More importantly, though, what we see here is yet another example of Danny Williams trying to divert attention from the main issue - how he will get Hebron back on track using his own super powers - by picking a fight with Ottawa that really isn't a fight at all. What's worse, if Harper were to act on Williams' supposed desires, we would see Danny Williams with less revenue from the offshore than he gets or wants to get and considerably less control over development than he currently enjoys but denigrates and squanders.

Every provincial government - irrespective of political stripe - since 1985 has used the power flowing from the real Atlantic Accord to our collective benefit. If we took Williams at face value, we'd believe he was planning to toss it all aside.

But if we've learned anything, we've learned that the Premier's publicity department is good at the quips but not much else.

in the meantime, Williams is aided in his superficial political communications by a bevy of supporters, some organized, some apparently not. Like Bill Rowe, Williams' former personal envoy to Hy's and currently the host of an afternoon call-in show on the province's largest commercial radio broadcaster.

Rowe took exception to one caller yesterday and launched into an unwarranted personal attack on the caller who dared note - as we have noted - the shortcomings of the premier's position. Rowe's own biases, which are both personal and partisan, are becoming increasingly more obvious as we get closer to election time.

But like his former boss, Rowe tosses aside facts in favour of invention. For example, Rowe should know full-well that Clyde Wells' remarks were about the Hibernia deal, not the Atlantic Accord. But facts - including things Rowe himself participated in - are irrelevant. Rowe seems to model himself after television talk-show host Stephen Colbert , without grasping that Colbert is a parody .

So between a Premier who talks in hollow sound bites, renders observations about himself but attributes them to others and a radio call-in host who thinks wikiality is a viable basis for intelligent society, Newfoundlanders and Labradorians are left wondering one thing:

When will Danny be hopping on couches?

We are far from done with the virals.

Oooooh. No.

Now we come to a spot released on the Internet in January to support a campaign by Friends of the Earth in the United Kingdom. While it has never appeared on television, the spot is hardly very racy by European standards. In North America, we'd likely have a hard time getting this on cable.

Many of you will have seen it already but for those that haven't, it features humour, sex, titillation and the tension from an anticipated conflict. It's the sort of top notch production you expect from an agency like CHI. Incidentally, if you are interested in seeing other samples of their work, check them out at chiadvertising.com.

While this spot plays on sex scandals among British politicians, the spot has an appeal that is universal, at least in the English-speaking world.

Yes, Virginia, it's more viral advertising.

To be effective, virals should be funny, simple and edgy to the point some times of being offensive to the more sensitive members of the community. They grab you, hold you and then deliver the message right at the end. The very best cross over language and cultural barriers.

Think of them as electronic limericks. Healey Willan, noted Canadian church organist, composer and limerick aficionado one said there are three types of limericks:

Limericks for women and children.

Limericks for the clergy.

and

Limericks.

Virals would fall into that third category. Sort of like "There once was a man from Nantucket..." but with pictures.

Here are two more virals that meet the requirements for damned good advertising let alone viral spots.

Car versus animals: The first is from the famous Ford Sportka series. These depict the sassy little car dealing with some of a car's well-known adversaries, like birds and cats. In the bird version, a feathered bomber swoops close to a Sportka only to be swatted by the car's bonnet in an act of self-defence.

The cat one is another story. See for yourself just how edgy this stuff can get. Cat lovers, beware this thing will insult your sensibilities just a tad.

But you won't forget the spot - and the car name - any more than you could ignore The Far Side's "Cat Fud" panel.

Car versus looney: As you recover from that one, try a classic spot from Volkswagen promoting it's new Polo.

No set-up required.

You heard it right.

Danny Williams is a wuss.

The great fighter, the fearless scrapper who promised only a few weeks ago to attack relentlessly anyone - anyone - who dared go against the best interests of Newfoundland and Labrador is giving up on the Prime Minister.

And to make it worse he is giving up without a fight.

Not even a harsh word.

Just a few pouty-lipped comments.

From CBC News this September Friday, based on an interview from the St. John's Morning Show:

Williams, who dragged former Liberal prime minister Paul Martin into a public battle over the Atlantic Accord and offshore royalties, said he is not heading for a showdown with Harper.

"The fact that the prime minister is not supporting me on the whole fallow field exercise and legislation, the only explanation I can see is obviously he's a supporter of big oil," Williams said.

"And if he wants to be a big buddy to big oil, that's for him to decide."

There were some other choice comments in the whole interview that are likely to leave more than a few people mystified at the difference between what Danny says at one point and what he says five seconds later.

We've mentioned viral marketing a couple of times on Bond Papers.

It's a relatively new phenomenon that uses the Internet as a way of spreading advertising cheaply and effectively.

There are some famous virals and others that should be famous; like the one featuring NTV's own Glen Carter from his days out west.

Thanks to youtube.com, we can finally show you Carter's acting debut in a hysterical spot for Faberge. Notice that unlike typical television advertising, this one runs about two and a half minutes. That's news story length. Carter is priceless here since he portrays what he is: a professional reporter. No actor can match it and from what we understand, Carter landed the job when he wasn't working as a reporter and after the marketing company had interviewed dozens of actors, all of whom bombed.

The new Nissan spot for their Bonavista edition of the popular X-Trail is shorter than Carter's piece. It's got some humour in it and, contrary to some of the commentaries going around, it isn't something we should be getting our ethnic sensitivities in a knot over. To the contrary, this spot, and the fact Nissan named its premium edition of the X-Trail after a locale in Newfoundland, makes it plain that there is some nouveau chic aspect to the province that will likely stand us in good stead.

The only thing I'd point out is that the actor here is not really very authentic. The perfect character to use here - and the perfect accent and dialect - would have been Kevin Blackmore, the famous Buddy Wasisname.

Kevin likely wouldn't have done the spot, but the dialogue could have been written to match his style and the delivery could have been done with an actor able to deliver a Buddy-esque performance. Check out the script for a routine Kevin, Ray and Wayne do, called Newfunese, and you'll get the idea.

Newfoundland and Labrador (2005)

Total oil production: 111,300,000 barrels
Total royalty: $491,526,000

Royalty per barrel: $4.42 [Source: Government of Newfoundland and Labrador]

Alberta (2005)

Total oil production: 219, 000, 000 barrels
Total royalty: $1,447,000,000

Royalty per barrel: $6.62 [Source: Government of Alberta]

Oil sands royalty per barrel: $1.74 per barrel equivalent [Source: Pembina Institute]

Notes:

1. Alberta's oil fields are mature, well-developed assets. The provincial government's royalty structure reflects the maturity of the fields, applying different rates of royalty depending, among other things, on the age of the field.

2. Alberta's 2005 total estimated revenue from oil, natural gas and oil sands was approximately $14 billion. Natural gas represented the largest portion of that amount at approximately $8.0 billion.

3. Alberta produced approximately 5.0 trillion cubic feet (tcf) of natural gas in 2005. Newfoundland and Labrador's entire natural gas reserves (proven and probable) is approximately 10 tcf.

4. Newfoundland and Labrador's three offshore fields provide revenues based on negotiated royalty agreements. Each agreement provides relatively low royalty to the province until the project development costs are recovered.

5. The Terra Nova project achieved pay-out in 2006. As a result, provincial royalties from that project will be 30% on each barrel of oil. As a consequence, the provincial royalty per barrel (as shown above) will increase substantially as projects move to higher royalties.

6. Memorial University economist Wade Locke noted for NOIA's 2006 conference that the provincial royalties are "profit-sensitive and increase dramatically with the price of oil".

7. Locke also noted that the federal and provincial governments receive more than 50% of the net cash flow from existing offshore production over the life of the projects:

NCF share, by project

Hibernia

Companies: 49%
Province: 27%
Federal: 24%

Terra Nova

Companies: 45%
Province: 40%
Federal: 15%

White Rose

Companies: 46%
Province: 40%
Federal: 14%

8. Hebron was estimated to provide between $8.0 and $10.0 billion revenue to the provincial government over the life of the project. This estimate was based solely on development of the Hebron field with its estimated 500 million barrels of oil. Development of two associated fields - Ben Nevis and West Ben Nevis - would add 250 million barrels of oil to that amount. As a result - and since those fields would likely be brought on stream after project payout - the revenue for the provincial government resulting from Hebron development under the tentative agreement reached in January 2006 would have been substantially increased.

The Hebron estimate did not include development spending, the major portion of which would have taken place in Newfoundland and Labrador.

9. The "equity position" demanded by the provincial government would have provided $1.5 billion in total additional revenue over the life of the Hebron portion of the project. [Source: Premier Danny Williams, comments in House of Assembly]

10. Under the Atlantic Accord (1985), the provincial government establishes its own revenue/royalty regime as if the resources were on land and therefore under the legislative jurisdiction of the province. There is NO requirement that the royalties and other taxation be approved by the federal government.

Clause 37 provides that the province can establish:

- royalties;

- a corporate sales tax that is the same as the taxation applied to all companies within the province;

- a sales tax as generally prevails in the province;

- bonus payments;

- rentals and license fees; and,

- other forms of resource revenue or taxation that may be applicable and that are generally applied to industries.

Wonder why Andy Wells has a hate on for Heavenly Creatures, a small, inconspicuous group that looks after pets no one wants?

Here's a theory.

He had a chat with Debbie Powers or someone else from the SPCA a while ago.

Without doing much other than check a few stats with the City's animal welfare people, he decided to lace into Heavenly Creatures with the full might of his "research" and the ever-present Andy sharp tongue.

Wells has never needed a reason to go off half-cocked before or sometimes completely cocked ~~-up~~ before but the similarity between his comments and those of SPCA head Debbie Powers a few days ago are just a little too close for comfort.

As a result of this whole thing, a tiny - and almost completely insignificant - little turf and image war some people seem to be waging with a very tiny circle of people in the East End of St. John's has blown up into another "scandal" with Wells at the centre of it.

Wanna check it out? Someone ask Andy when he spoke to Debbie about this matter: specific dates. There's a looney riding on the likelihood Wells spoke to Powers or someone else from SPCA shortly before he went bizarrely ballistic on Heavenly Creatures.

Either than or he just feels that the name draws negative attention to the unheavenly creatures council usually votes in some of its resolutions.

Oh yeah: and Danny thinks Andy Wells has the judgment to be responsible for the province's oil and gas resources.

Fresh from his trip to Iceland and Norway, Premier Danny Williams issued a statement today claiming he learned many valuable lessons.

When you look at what the Norwegian government has done over the years to ensure their natural resources benefit the people of Norway, I am more convinced than ever that our government's position with the oil and gas companies is reasonable and fair...When you consider the enormous taxation levels in Norway and equity participation, the fact that we are looking for a greater return on a field that has been sitting idle for 30 years is certainly realistic.

So much for learning anything. For some time now the Bond Papers has been pointing out that the way Norway approached its offshore oil and gas development with state-owned enterprises is exactly, diametrically,100% the opposite of the way Danny Williams is trying to go.

The Norwegian companies - Statoil and Norsk Hydro - not Crown monopolies even though Danny Williams told VOCM's Bill Rowe on Monday that Statoil is 100% owned by the government of Norway. They operate at arms length from the Norwegian government and basically operate like a private sector company. If they have a stake in the oil business, they earned as in worked for it and paid for it.

Williams' approach with Hydro Corporation is to force his way into the business with a corporation that has exactly zilch in the experience department. He doesn't seem to want to do as the Norwegians did and learn from the ground up. He wants to start at the top and that is, to put it mildly, impossible.

As for the Premier's claims about Norwegian fallow-field legislation, he should understand the difference between the North Sea and the local offshore. The problem with Hebron, for example, was not that commercially viable field sat in the ground since the time it was discovered. Note that Williams exaggerates the time frame as part of his typical exaggeration and sometimes blatant misrepresentation. When it was first discovered,Hebron was declared commercially not viable.

It only sits undeveloped today because he couldn't reach an agreement with the oil companies on the project. No one - that's right - no party is willfully holding up Hebron development - unless we include Danny Williams in the calculation. Not only does fallow-field not apply in this instance, or indeed in most instances in the local offshore, applying any legal force to the Hebron companies would likely result in very costly lawsuits the Premier would ultimately lose and which the taxpayers of this province would ultimately pay for in spades.

What Hebron needs to get underway is not legal muscle for Danny Williams but business acumen and negotiating skill.

As for gas fields that lie fallow, the issue has been studied for some time. If Danny Williams wants to encourage gas development he could issue a gas royalty regime that has been sitting in the natural resources department largely unaddressed since before he came into office.

That just brings us back to the bigger part of Williams' comments on Norway, namely the taxation regime. Norway takes revenue from its offshore based on a number of factors not the least of which is the fact that the total local offshore could fit into a tiny corner of Norway's reserves. Bigger assets give Norway clout in the marketplace. But even if there were sizeable resources offshore this place, Danny Williams knows full well that he has right now, as we speak, every single legal power to establish a taxation and royalty regime for the offshore that he thinks is the right way to go.

He doesn't have to bitch about other people doing better than we are.

He doesn't have to blame Ottawa.

If there is a problem with the provincial revenue regime, Danny Williams has the power to change it right now.

All by himself.

And the marketplace will decide if the offshore gets developed.

And that might be the problem.

Another piece of news today might us a clue as to why Williams seems to prefer blaming others and whining rather than actually doing something, why it's easier for him to talk about the rewards manana.

Chevron announced a major discovery in the Gulf of Mexico that could, according to some experts, rival the Alaska fields as the United States' largest domestic source of oil.

With that kind of competition, Danny Williams doesn't stand much of a chance of attracting any major investment to the local offshore, especially if he just keeps upping in the ante based on fantasy and misrepresentation.

Lobbyists are hard at work trying to reconcile to bills passed recently by the United States Senate and House of Representatives that would open significant oil and gas reserves to development.

Businessweek online reports that industry watchers are adopting a waiting posture to see if the political issues in the bills will ultimately kill the initiatives.

Chevron announced Tuesday that it has found what appears to be commercially viable quantities of oil from a field in deep water in the Gulf of Mexico.

Exploration in the Gulf of Mexico has flourished in the past decade owing in many respects to American government policies that promote exploration and reduce the costs of developing wells in challenging offshore regions.

The United States Congress recently approved release for exploration of 8.5 million acres of lands in the Gulf of Mexico that are estimated to hold as much oil as the Hibernia project and natural gas of over six trillion cubic feet (tcf). Total natural gas reserves off Newfoundland and Labrador are about 10 tcf.

One of the partners in the latest discovery project is Norway's Statoil, owned in part by the Government of Norway. Reporting to a local radio call-in show on his recent trip to Norway and Iceland, Premier Danny Williams incorrectly stated that Statoil is owned 100% by the Norwegian government. Decisions taken within the past two years by the Government of Norway have reduced its interest in the oil company to about 70%. The Norwegian Crown holds a 43% interest in another Norwegian oil company, Norsk Hydro.

Williams appeared to be whining about the success of other areas in securing development and benefits of offshore oil and gas. He gave no indication of what policies he might implement to stimulate the province's exploration sector or to promote development of existing fields. Williams noted the tax and royalty regime in Norway but gave no indication that his administration is considering significant changes to the local tax and royalty regime even though the provincial government has full control of its own revenue setting.

Williams did complain that the federal government has refused to discussed Williams' proposal to use legislation to force oil companies to develop oil and gas fields. Williams did not tell listeners that so-called fallow-field legislation - one idea he has proposed previously - would not necessarily change the situation offshore Newfoundland and Labrador where technical challenges and other considerations make development costly.

Talks to develop the province's fourth oil field collapsed in April when the province insisted on an ownership stake the project proponents could not agree on and the proponents asked for $500 million in tax concessions which Williams was not willing to consider. The total estimated provincial revenue from the project was $10 billion over its lifespan. Subsequent development of two other fields associated with the project - not included in the talks - would have increased provincial revenues significantly beyond the estimate for Hebron alone.

[This is the third and final instalment of a three part series looking at public opinion polling and provincial government media relations. In the first installment - Playing the numbers - we looked at the broad issue of news releases output and content. In the second - The media and the message - we looked at the media relations activity of the Williams administration. In the last installment, we'll pull the whole thing together and take a look at why government does what it does.]

The grass isn't always greener; sometimes it isn't even grass

In politics, astroturfing is the use of orchestrated activities designed to create the illusion of popular support for or opposition to a candidate, a political party or a government program.

The word is a play on grassroots - genuinely spontaneous political action - and derives from the artificial cover used on sportsfields around the world.

Danny Williams' administration, like the two Liberal administrations before it, uses astroturfing to plant letters to the editor but more typically callers to radio talk shows. The plants get e-mails or telephone calls giving them the approved comments for the day or for the topic. More often than not they turn up alongside a raft of cabinet ministers, parliamentary assistants and backbench members of the provincial legislature extolling the virtues of their party and condemning its critics.

What makes this type of astroturfing effective is a combination of several factors. First, call-in radio shows are all found on a single outlet and occupy eight and half hours - that's right, a full workday - from Sunday to Friday.

Second that outlet - VOCM - has a perfectly valid approach to its news programming that simply presents what it is given without much filtering.

Third, VOCM has such an audience that its news and current affairs programming is heard by one of the largest radio audiences in the province.

Fourth - and no less important - is the near complete absence of an effective opposition. The New Democrats under former leader Jack Harris spent more time agreeing with Danny Williams than disagreeing despite the fact that theoretically a conservative party and a social democratic party should be ideological polar opposites.

The Liberals under both Roger Grimes and now Gerry Reid have been consistently unable to mount a coherent and sustained round of political attacks that would be normal for the party with the second largest standings in the legislature. Even though the Liberals under first Tobin and then Grimes used the astroturfing technique extensively in government, the Liberals now on the opposition benches seem unable to grasp the simple notion that they can influence public opinion just as easily as the government party can.

Managing the information flow

In the second part of this series, we looked at the Williams administration's approach to media relations. It encompasses astroturfing the radio shows and newspapers' letters pages. It also includes orienting their interviews to isolate news organizations one from the other. There is nothing illegal or unethical about it, but there is no question that on some issues - as in the Ruelokke matter - Williams will give special attention to the other major news outlet in the province, NTV, that also follows the approach of presenting its news with little filter or interpretation.

Make no mistake, the major news organizations in the province are universally professional, competent and ethical. There is absolutely nothing improper about the way NTV and VOCM report news, nor is there any explicit or implicit value judgment in the difference between the way NTV and CBC, for example, or NTV and The Telegram handle the news.

That said, sophisticated news consumers should be aware that the provincial government can and does vary its approach to certain media outlets. They show a marked preference for the two outlets with the largest audiences which also tend not to generate news on their own.

The provincial government also goes to considerable lengths to frustrate efforts to find out things that the public has every right to know but which government - for whatever reason - doesn't think it should have. The Telegram, for example, submits so-called access to information requests for government information that is supposed to be readily available under the province's Access to Information and Protection of Privacy Act.

Consider the number of times however, The Telegram has had to resort to every possible avenue of appeal to squeeze information from the current administration. One of the most infamous examples was a request in 2005 for polls commissioned by the Williams administration in 2004. Government did relent - six months after the privacy commissioner ruled against it, but it did its very best to stonewall and flat-out refuse to release information that would have given The Telegram something other than news on government generated by the government itself.

The perils of polling

One of the reasons Danny Williams tried to hang onto those polls is that they are extremely important clues as to how he governs. There wouldn't be any secret information in them but knowing what was researched and when might just provide some clues as to how Williams goes about his business. There were quite a few of them - almost one a month for a while - and they were all conducted by Ryan Research, the Premier's favourite pollster.

Bond Papers already discussed one of Williams' early polls, during the flag-flap in late December and early January 2005. Having pulled down Canadian flags, Williams was keen to know if he had made the right move especially after he started to receive tons of e-mails and letters in a genuine grassroots campaign aimed at expressing displeasure at his use of a national symbol for a political purpose.

Ryan's questionnaire was laid out in a way that would tend to produce support for Williams. But interestingly enough, despite what appear to be best efforts at skewing the results on the key question - about pulling down the Maple Leaf - respondents took the extreme negative choice. By the way, Williams likely got the results late on the 9th of January or early on the 10th before he went into a news conference on the Lower Churchill. In the newser Williams suddenly and unexpectedly announced the flags were headed back to the top of the flagpoles on government buildings.

As this series has demonstrated, polls are at the heart of much of Danny Williams' political communications. The poll in this case is the quarterly omnibus by Corporate Research Associates (CRA). There is simply no doubt that the current administration plays to the polls in an effort to goose the results. Those results - reported publicly by CRA as part of its own marketing - and covered throughout the province have become a well-established sign of political health for a government. It looks like the results are scientific and devoid of any undue influence, but the amount of energy Danny Williams expends in goosing the numbers suggests that they aren't.

CRA isn't doing anything wrong here any more than NTV or VOCM. In fact, CRA has no control over how its publicly-released results are used. CRA uses the results of their data collection as a marketing tool, nothing more.

That said, it should be understood that these polling results - like most publicly available polling results - don't necessarily reflect the actual mood in the province. Not only is the reported margin of error sometimes appallingly high - pushing 5% in some instances - we simply don't know how the data was collected or how the sample broke down with respect to age, geographical location, sex and other demographics all of which can influence results. Since there isn't another set of publicly-available polling with which to compare it, the CRA results are, in some respects, nothing more than a bunch of numbers.

All that is solid becomes air

The Williams administration plays to the CRA polls in order to use the polling results as evidence that Williams is politically unassailable. Not only is he politically unassailable, but his supporters often use his supposed popularity as a means of stifling dissent within the province and foreclosing any debate of substantive public policy issues. It doesn't matter if you don't agree with his policy, so the line goes, everyone else does: "See the poll results?"

The Williams administration supports its poll goosing by controlling the flow of information to the extent that it can. This makes informed public debate - and genuine informed consent - almost impossible to obtain. It also means that government is, on many levels, fundamentally unaccountable

As in the case of the recent release from finance minister Loyola Sullivan, information on something as fundamental as the province's financial health can be presented in a misleading way as part of the poll goosing efforts. So effective is the effort that even the opposition finance critic will swallow Sullivan's claim from the news release that he wound up with an extra $68 million in the bank last year. The reality - buried in an attachment to the release - shows that government actually wound up with over $700 million in surplus on current account and a net surplus of over $500 million for government operations as a whole.

Beyond the implications for the health of democracy in the province, playing to the polls puts the Williams administration in a precarious position. So much of its energy is devoted to poll playing that it seems unable to make difficult decisions for fear of the impact on the poll results. Promises are made, in Harbour Breton, on the fishery, in Stephenville that are popular in the short-term but which are not kept. The Premier's fiscal plan based on supposedly reliable financial information and announced on January 5 2004 is abandoned less than six months after it is announced simply because his polling numbers suffered too drastic a decline.

This failure to adopt a course for good reasons and stick to it is abandoned on public opinion polls which themselves are subject to statistical variation anyway and which are measuring something which is inherently variable from moment to moment. The result is a government which can develop a politically deadly credibility problem and which, in the minds of potential financial investors in the province - for example becomes simply too unpredictable and unreliable.

For the politicians, their problem is masked by attention to the polls. The polls become a self- imposed delusion.

Ultimately, the Williams administration's addiction to good poll results makes it vulnerable to any slipping of the numbers. A slip in the next poll can easily become the crack in the dyke that simply continues to spill in the months leading up to the next election.

The story for many will become the implications of a decline when it occurs. If it is a 10% decline, Williams will likely find himself dealing not only with the real issues of economic slowdowns themselves the result of government decisions, a scandal in the legislature which is far from over and a general lack of progress on any major economic files. He will also be facing the very real implications as the illusions he has worked to create vanish before his eyes.

From vocm.com comes this update on the Saga of Danny Clench Jaw and Tom Shakey-Legs as they voyage eastward across the ocean from Vinland to Iceland, ancestral homeland of the Norsefoundlanders:

Given what he has seen so far, Williams says the possibilities for Newfoundland and Labrador are endless. He says Iceland is an island on the edge of the Arctic Circle and if it can be done there, it certainly can be done in this province. Williams says he'll be taking a close look at Iceland's energy model. Williams and Rideout are also visiting Norway for meetings with government officials and Norsk Hydro.

Now right off the bat, da byes are supposed to be heading back tomorrow so if they are actually still in Iceland they are gonna have to get a push on.

But anyway, if this little story is right Danny Williams is going to look at how Iceland generates energy since "if it can be done there, it can certainly be done in" Newfoundland and Labrador.

Minor problem.

Iceland happens to sit on some pretty special geological real estate such that they country has active hotsprings and a volcano that's been known to erupt every so often. 87% of the country's heating needs are supplied by geothermal energy. That's heat from the Earth to you and me.

So of course, not everything done there can be done here.

Clint Eastwood is shooting a movie based on the American invasion of Iwo Jima in the Second World War. He's going to Iceland because it is cheaper and easier to reach than Iwo and it just happens to have volcanic soil that looks a lot like the soil in Iwo.

Checking the map, we see no record of a volcano in Newfoundland or Labrador in recent times although we have had a couple of politicians with volcanic tempers.

Not the same thing.

Sadly it seems that as Clench Jaw and Shakey-Legs wander the eastern seas in search of political Valhalla, they are becalmed in the Sea of Hyperbole.

Perhaps they'll have better luck in Norway as the Saga continues.

[At right, Tom Shakey Legs models a traditional Norsefoundland helmet for his Icelandic breathren.]

From Aurora Energy late yesterday comes the terse announcementt that Dean MacDonald resigned from the company's board about 48 hours after he took up the appointment.

You'll find the reasons for the resignation in Moira Baird's story on the front page of the business section in today's Telegram.

After a length claim about Hydro's extensive protections against conflict of interest, MacDonald said this:

"But, just on the basis there might be perceived issues, it's just not worth the hassle."

Later in the story, MacDonald is quoted again:

"Usually, everything that comes at me is a conflict and I have to turn it down. This one, I thought, was clean."

There were three potential conflicts or appearances of conflict in the appointment and these should have been blatantly obvious from the outset. At the very least, Aurora would have been coming to MacDonald's Hydro corporation to secure power in the event its uranium deposits are developed commercially.

Of course, if MacDonald had thought the thing through and concluded there was no conflict, he'd have stuck it out. Evidently someone saw it differently.

MacDonald can rest assured he has done the right thing by resigning. Now he can focus his energy on the Lower Churchill.

[This is the second of a three part series looking at public opinion polling and provincial government media relations. In the first installment - Playing the numbers - we looked at the broad issue of news releases output and content. In the second, we'll look at the media relations activity for the provincial government. In the last installment - The perils of polling - we'll pull the whole thing together and take a look at why government does what it does.]

All those news releases issued by government contain messages it wants you to receive. The messages are usually simple: All is well; there's a new school or hospital; another problem has been solved; the Premier is doing a marvelous job.

Simple messages are easier to retain and when they touch on strong emotions they are even more potent. It's no accident, for example, that in tackling the federal government over a few billion dollars in additional transfer payments, Danny Williams kept his core message simple: I am fighting for you to get what is rightfully yours; untrustworthy foreigners are trying to rob us once again.

Details were irrelevant and ultimately distracting from Williams' purpose. He simply wanted overwhelming popular support. Framing the entire discussion in strongly emotional terms designed to play on popular images of a province looted by evil foreigners ensured that he would command unquestioned and unquestioning support from virtually everyone in the province.

He got it. Public opinion polls done for the Williams' government, and later released only under duress, showed public support approaching every person in the province.

However, issuing news releases and framing simple messages are not enough. The messages have to be communicated to the audience.

If we wanted to sell widgets, we'd likely buy advertising and run as many ads as we could afford on television and radio and in print. The more people see of the same message the more likely they are to retain it, unless the message is a complete affront to their moral sensibilities.

Repetition is the key.

The impact of news media

While paid advertising works just fine to sell cars, for example, it lacks the inherent credibility to persuade the same car buyer that his or her government is doing a splendid job. No matter how many times people saw the television spot lauding the party of the moment, only the most hardcore of the party's supporters would swallow it unquestioningly.

News reporting, though, is different. According to some research, people get about 60 to 70% of their information about the world from news media and the electronic media, especially television, is by far the dominant information source. People tend to accept what they see reported as being factual and more often than not it is. So while a 30 second television spot announcing a new school would be largely ignored or treated with suspicion, having Fred Hutton report the same information would get an entirely different reaction.

The power of news is why advertisers desperately try to get their product featured in news coverage. For the typical marketer, public relations is code for unpaid media coverage and all the influence that brings. And for government, news releases are a way of communicating to their audiences using radio and television stations and newspapers. They are called news media because they are a medium - a conduit - through which information flows.

The limited local market

Over the past decade, the news media landscape has changed dramatically in Newfoundland and Labrador. Mergers, budget cuts and changes in how people take news have reduced the entire media environment to a handful of newsrooms.

There are only two dominant ones, the ones with the biggest daily audience: NTV and the four radio channels operated by Steele Communications as some part of the VOCM organization.

Coincidentally, those two outlets are also the ones that do very little - if any - investigative reporting. Both NTV and VOCM give the news with little interpretation or analysis. There's absolutely nothing wrong with their approach, but in a marketplace where they are the unquestioned behemoths, they are also uniquely useful to a government that would like to get its version of events to as many people as possible.

VOCM offers the added bonus of eight hours of free airtime through its talk-radio shows. As Bond Papers noted in April, the provincial government spends an inordinate amount of energy on what we derisively called "yack radio".

During polling periods there is a noticeable increase in the number of calls from government politicians, some of whom are heard from so seldom their pictures were likely to appear on a milk carton. They call, say their piece and, in the case of cabinet ministers, are likely to have their comments turned into news clips that will be repeated for the next 24 hours.

Repetition is the key.

Williams' approach: not all newsrooms are equal

One example from the last polling period indicate not only the value government politicians see in outlets like VOCM but also the varied way they treat news organizations based on audience share.

In the wake of the Ruelokke decision, Danny Williams was silent. However, Open Line host and veteran newsman Randy Simms observed that one news release from government was little more than nine paragraphs telling that a series of meetings had been held and that the major agreement was to continue meeting. There was no news at all in it and Simms pointed it out, honestly and fairly.

No sooner had he made the remarks than the Premier appeared on the line, interrupting what he himself described as an important meeting. Williams disputed Simms assertion but then found himself being asked about other issues, including Ruelokke. That was the first time we heard Williams criticize Mr. Justice Raymond Halley personally for his ruling.

Other media - whom Williams had been avoiding - were understandably annoyed. His response was to grant interviews on Ruelokke but how he handled them is revealing. Ordinarily a busy politician will handle reporters in a group, commonly known as a scrum. All get to ask questions and all share the results.

Williams broke up the requests. He granted The Telegram's Craig Jackson a telephone interview. CBC Radio and CBC television got a separate scrum in the lobby of Confederation Building. Mike Rossiter and Chris O'Neill-Yates pressed Williams with tough but fair questions, however their questions and Williams' replies would only be carried on their own outlets with their comparatively small audiences.

As for NTV, Williams went to the studio on Logy Bay Road for a sit-down interview and what amounted to five minutes of free airtime to the largest news audience in the province. The questions, from Mike Connors, were straightforward, professional and factual but nowhere near as challenging as the others.

Williams got to present his own messages clearly and unfiltered to the largest audiences. By handling the interviews separately he guaranteed that NTV and VOCM did not have access to his responses to questions they didn't ask, responses that came from questions that challenged his fundamental messages.

Drawing it together

Of all the organizations in Newfoundland and Labrador, the provincial government never has to struggle to make news. Money, power and celebrity all make news routinely.

In the first installment we demonstrated that there is a correlation between government news release output and polling periods and also a correlation between good news release and polling periods.

But a more detailed assessment suggests that the provincial government also varies its approach to news media based on each newsroom's ability not only to reach an audience but provide government with as much chance as possible of presenting its own messages. The current administration, like its predecessors back to 1996, issue news releases in a pattern related to CRA's polling and deploy supporters in a pattern designed to ensure that its messages are communicated to the largest audience possible with as little filtering as possible.

Repetition is the key to influencing opinion.

Beyond mere repetition, the example presented above shows the value the Premier places on VOCM as a means of influencing public opinion. His subsequent handling of other news media interviews on the Ruelokke case demonstrates an effort to manage the message flow.

The current administration has an advantage its immediate predecessor lacked: an impotent opposition that is unable to grasp what is being done and to deploy its own efforts to counteract the government's activities. It's politics, after all and they have every right to do that. Pointing out that the Premier is trying to goose polls is almost meaningless.

And if there is any lingering doubt about the Williams' administration efforts to influence polls, check for yourself. Listen to yack radio and see how many cabinet ministers are calling in this, the week after polling stopped. Take a look at the government website and notice how few releases are being issued compared to previous weeks.

Tomorrow, we'll wrap up the series with a look at the CRA polling itself and what impact the government's playing with numbers has on public policy and political dialogue in the province.

[This is the first of a three part series looking at public opinion polling and provincial government media relations. In the first installment, we'll take a look at the broad issue of news releases output and content. In the second - The media and the message - we'll look at the other media relations activity for the provincial government. In the last installment, we'll pull the whole thing together and take a look at why government does what it does.]

Over the past decade, political watchers in Newfoundland and Labrador have come to accept the idea that the government party will adjust its media activity to coincide with polling periods.

The theory behind it is simple. Since there is only one pollster who collects data at regular, known and predictable periods, a flood of "good news" issued at the right time can reinforce positive feelings toward government or, at least, neutralize or counteract negative feelings.

Marketing researchers will do this routinely. In the wake of a flurry of advertising, they will conduct a short research program to see if the advertising had an impact on a randomly selected sample of the target audience. While marketers may have to establish a baseline - a survey or other research done before the advertising hits - political parties have the advantage of having a rolling baseline of regular polling done either privately for the party itself or publicly.

In Newfoundland and Labrador, only Corporate Research Associates (CRA) conducts quarterly polling. CRA's omnibus poll puts questions to random samples of the provincial population, on behalf of paying clients - including the provincial government - and includes a series of three standard questions on political attitudes.

Lately, CRA has taken to conducting two separate omnibus polls within the span of two to three weeks. The three political questions are CRA's own and are released shortly after the data is collected and analyzed. For them it is a simple marketing device to keep CRA's polling profile high. CRA's news releases are invariably picked up by media outlets in the province and Don Mills, CRA's president is readily available to provide some commentary and analysis.

There's absolutely nothing unusual about CRA's actions: it's just good business. Their questions are standard and, all other things being equal, they should pick up attitudes reliably.

The idea of politicians trying to influence polls got a special highlight during the most recent CRA data collection period (started 12 Aug, for about two weeks). The Liberal opposition issued a news release alleging the Progressive Conservatives were trying to goose the numbers. The Liberals should know since the practice of playing to the polls started under Brian Tobin.

For their part, the Progressive Conservatives dutifully denied any such activity. CBC reported that the Premier's Office stated that "the number of news releases issued recently is consistent with general distribution."

Don Mills defended his research work to CBC:

"It would be, in any case, a very difficult task, because people form impressions over a course or length of time on many issues," Mills said.

"[That's] not to say they couldn't be influenced by a string of good news announcements but, frankly, I doubt it."

Peaks match polling periods 11 out of 12 times

In order to examine the idea of government trying to issue a string of well-timed, "good news" releases, let's first take a look at the volume of releases coming from the provincial government.

If the volume was consistent with general distribution - whatever that is - we'd expect to see a fairly constant number of releases issued. There might be some identifiable peaks and troughs like at budget time, around Christmas and during the summer. Alternatively, we might see some random peaks and troughs driven solely by the operation of government itself. Again, we might see some identifiable peaks at times when there is a lot of news - budget time - or valleys when people are off for Christmas holidays.

CRA polls at predictable times each quarter of the year, usually varying the start and end times of its data collection by a day or two year to year. Government subscribes to CRA's omnibus so it would know well in advance when Don Mills' people will be hitting the phones. Therefore, if we have regular polling and random peaks and troughs of news release volume, we wouldn't expect to see much of a correlation between the polling periods and the news release output.

Figure 1, below, shows the number of news releases issued each week beginning in the fourth quarter of 2003 and continuing to the first part of August 2006 before recent polling started. It includes all types of news releases and media advisories on the provincial government's website.

Fig. 1. Government news releases, total by week
4th quarter 2003 to current. Green lines mark CRA polling periods.

In 11 of the 12 polling periods since the last quarter of 2003, government news release output peaks either immediately before or during the polling. In the one exception, the volume increases steadily during the period and peaks immediately after polling ended.

On the face of it, this suggests that government news releases are not being issued at random. They are not "consistent with general distribution". Rather, there is a fairly obvious connection between output and polling. Even more interesting is the fact that more often than not the peak output is immediately before polling starts.

If someone was trying to influence polling, the best time to peak "good news" would be immediately before data collection started. That way, there is the greatest likelihood that the good news will be fresh in public minds when the telephone calls start.

A little good news

Volume of news releases alone isn't proof of an effort to influence polling results, though. The results we've found so far just give ius a clue something is up that isn't random.

The next task is a content analysis - taking a look at what the releases say. The past three weeks are instructive. For the period 31 July to 06 August, government issued 27 news releases, followed by 34 the next week. During the two weeks when CRA was actively collecting data, government issued 27 releases each week.

August is normally a time when people take vacations. Yet, in the first week of the month, the provincial government announced $1.5 million in funding for the College of the North Atlantic; an expansion of family law services; changes to social assistance funding to give clients more money; almost $75, 00 in funding for the Association for New Canadians; $200,000 for silviculture projects; and, upgrading of a health care clinic in Baie d'Espoir, among other positive initiatives.

In the week immediately before polling started, the provincial government announced progress on funding for the Trans-Labrador highway; $7.0 million for a new school in Torbay; $78, 000 in violence prevention for aboriginal communities; $7500 and a speech from a cabinet to support a conference on rural development; $82 million in federal money for municipalities; $137, 000 for renovations to public housing; and, a $6.3 million sports centre in St. John's.

The provincial government also issued a news release on the proposed dismantling of the Stephenville mill. This story broke in a routine public advisory of projects needing environmental review.

Curiously, the very first release of the following week announced a successful resolution to a problem in Stephenville where used tires have been piling up as part of a problem-plagued provincial government program dating back to the Liberals. Even though government won't know until October if the solution even exists, they issued the release anyway.

Finance minister Loyola Sullivan issued a news release announcing that the provincial government's finances were in even better shape than previously announced. One of the many odd things about this release was that it contained information normally released in November once it had been reviewed by the Auditor General. Sullivan claimed he was announcing the news early, unauditted and to the general public so that government officials could have the latest information in managing their budgets.

The general pattern continued throughout the week, with the first release on Friday announcing $1.45 million for economic development in Stephenville. In the next week, the general trend continued, but this time included $5.5 million in funding for College of the North Atlantic in Goose Bay; increased fees for dentists (framed as improved dental care for children); and, new police officers in the crime intelligence field.

Conclusion

The provincial government news release output coincides with Corporate Research Associates' polling periods too frequently for it to be accidental.

The news release content tends toward "good news" moreso than one would expect to find if release content was random or than one would expect in a period like August when most people tend to be on vacation.

Even when bad news does appear - such as the routine Stephenville environmental notice - it was quickly counteracted with not one but two positive announcements.

There's no question it happens.

In the next installment, we'll look at why.

Revised: 8:15 AM

If Danny Williams checks with the Norwegians on good standards of corporate governance, he will quickly realize just how bad an idea it is for his administration to have established so many conflicts of interest involving the Hydro Corporation, its board chairman, the Premier's Office and one local company.

As announced on Monday, the chairman of the Hydro Corporation now sits on the board of Aurora Energy. Dean MacDonald took the place of Brian Dalton, president of Altius Minerals, a company that is currently looking for an interest in Hydro's Lower Churchill project and which is also undertaking a refinery study as announced by the Premier in February. Altius established Aurora in 2003 and remains its second largest shareholder.

Norsk Hydro's policy makes it clear that such conflicts of interest cannot be tolerated.

6.4 Financial interests in other businesses

As a Hydro employee or Board Member, you should avoid having a personal ownership interest – directly or indirectly – in any other enterprise if it compromises or appears to compromise your loyalty to the Company. Before making an investment in a company that competes with the Company or does business with the Company (such as a supplier), other than acquiring less than one percent (1%) of a listed company, your immediate superior shall be consulted. Special attention should in all circumstances be given to potential conflicts of interest as described in
section 6.1.

6.5 Activities with a competitor, supplier or other business associates

Before engaging in any activity that may be perceived to advance the interests of a competitor or a supplier (or other business associates) at the expense of Hydro’s interests, including serving on the board of such company, you shall consult with your immediate superior.

The bit about consulting with a superior isn't important. In this instance, MacDonald likely accepted the Aurora appointment with the full knowledge and approval of Danny Williams.

The key part is that such a blatant set of conflicts of interest as evidenced by the MacDonald appointment should never have existed in the first place. If it turns out that the Premier did not know about the matter - remember Henley v. Cable Atlantic and Deano's penchant for not telling Danny stuff - then the episode suggests that Dean MacDonald exercised monumental bad judgment.

If Altius is pitching to Hydro as it is, then Dean MacDonald should categorically not be sitting on the board of a company in which Alitus is the second largest shareholder. If Altius is involved in a refinery project which would likely also fall under Hydro to exploit if government joins in, then Dean should absolutely, positively not be involved.

The same goes for Danny Williams involvement in announcing Altius' private-sector venture on the refinery.

Anyway you slice it, this situation causes problems.

It seems Danny Williams doesn't care about conflict of interest unless it involves someone he's ticked off with. Don't forget that he engineered a blatant conflict of interest to exist in his use of the Hydro president as lead negotiator on the Hebron file. Odds are good, he'll think nothing of further connecting Alitus and the provincial government. In his ongoing efforts to get control of the offshore regulatory board, Williams is trying to create the ultimate conflict of interest in the offshore oil governance game.

Danny Williams would do well to consult the Norwegians on good corporate governance. They can teach him a great deal.

The only problem might lie in the fact that implementing their advice would expose Danny Williams to a great deal of criticism for decisions he's already taken.

Revised: 29 Aug 06

A news release late on Monday from Aurora Energy announced the appointment of Angus Bruneau and Dean MacDonald to the company's board of directors.

Dr. Bruneau and Mr. MacDonald are replacing Mr. Brian Dalton and Mr. John Baker who have resigned from the Aurora Board. Mr. Dalton and Mr. Baker, directors of Altius Minerals Corporation, a significant shareholder of Aurora, have expressed the view that the Company [sic] would best be served at this time by their replacement with two fully independent and experienced new directors. The Company [sic] would like to thank Mr. Dalton and Mr. Baker for their valuable contribution in the successful launch of Aurora.

Dalton is president and chief executive officer of Altius Minerals, the second largest share-holder in Aurora. Baker is a director of Altius and a senior partner with White, Ottenheimer and Baker.

Update: Before you go another step take a look at the biogrpahical sketches for Bruneau and MacDonald. Bruneau - who founded Fortis in 1987 and has sat on the Voisey's bay board - fits with Aurora like a glove. MacDonald, whose private sector background is in stuff like cable television, looks like a square peg in the proverbial round hole.

Altius created Aurora Energy in 2003 with Fronteer Development Group to evaluate and explore uranium-rich deposits in central Labrador. Aurora recently completed a successful initial public offering.

In 2005, Altius submitted a proposal to create a royalty trust as a way of financing the Lower Churchill project, currently being pursued by Premier Danny Williams through Newfoundland and Labrador Hydro. MacDonald is the chairman of Hydro's board. According to Altius' website, the royalty trust proposal is still alive.

At the same time, Altius is also pursuing a feasibility study on a second refinery in the Come by Chance area. The study was announced in February by Premier Danny Williams and then-energy minister Ed Byrne. The announcement was highly unusual since government played no role in the entirely private venture.

In early August, Altius announced that Aurora had found significant results in its drilling on the Michelin property in Labrador.

There's something about Danny Williams' trip to Iceland and Norway that doesn't add up.

First, there's the suddenness of it. No one has talked publicly about the need for a fact-finding trip, so one is naturally suspicious of the timing.

Second, it seems passing strange that the provincial government would be heading off to Iceland three years into the mandate to learn lessons from the small fishing nation. Surely someone could have taken a trip a couple of years ago before the situation got as bad as it is today.

Third, the trip to Norway ostensibly to learn about the Norwegian energy industry comes after the provincial government has made changes to organizations like Newfoundland and Labrador Hydro. The time to learn from the Norwegian model was a year or two ago. Instead, Williams has created a situation which is diametrically opposite to Norway's good governance practices. Of course, Williams can still learn something but if he does, it will mean a round of new legislation to undo or dramatically alter many of the changes already made.

Through it all, though one cannot help but notice one specific thing that is extremely odd about the make-up of the delegation from this province:

Missing from the contingent is Kathy Dunderdale, newly installed minister of natural resources.

She's most likely not taking the flights with Williams and deputy premier Tom Rideout because it will fall to Dunderdale to announce that the provincial government is acknowledging the appointment of Max Ruelokke as the chairman and chief executive officer of the Canada-Newfoundland and Labrador Offshore Petroleum Board.

Williams will be wheels-up on Tuesday and Dunderdale can make the announcement - and take the flack - so Ruelokke starts work immediately after Labour Day.

In the meantime, Williams just might be able to learn a few things from the Icelanders and Norwegians. That would mean he will have to dramatically alter his current energy plans and relinquish direct control over organizations like Newfoundland and Labrador Hydro. It would also mean he and Rideout will have to abandon their current approach to fisheries issues. No one should be holding his or her breath on that one, though.

The trip might be a case of better late than never; but since the whole junket is likely nothing more than an excuse for Williams to skedaddle while his energy minister takes the flack over Ruelokke, the odds of Williams altering plans already laid would be pretty long ones.

While political campaigns have always used some form of mass communication, the use of advertising and modern advertising techniques only really took hold after the Second World War.

The American Museum of the Moving Image has compiled an archive of television commercials from American presidential campaigns beginning with the 1952 Eisenhower-Stephenson contest.

The Living Room Candidate is a compelling collection of some of the most influential advertising ever created.

One of the most potent was "Prouder, Stronger, Better", for the Reagan-Bush re-election campaign in 1984. Over 20 years later it remains an emotionally striking 60 seconds of film. You don't need to recall the turmoil of the 1970-80 period when Reagan was first elected. Watch this and you'll be moved.

You can also find the famous Democratic spot from 1964 featuring a little girl and an atomic explosion and the Republican spot from 2004 featuring a flip-flopping John Kerry.

Prouder, Stronger, Better is more commonly known as "Morning in America", taken from the opening line of the 30 second version. The copy below is taken from youtube.com and while it isn't as good a copy as the one linked above, the effectiveness of the music, voice, images and script are still there. This is the gold standard of political television spots.

So why is it that the former darling of both the Independent and VOCM's radio call-in shows can't seem to get arrested these days.

First, VOCM asked her to abide by the rules and call the shows one a week as opposed to once a day for each of three shows for a while.

The self-styled "hydro-queen" took her teddy and vowed to boycott the entire station for a year. (It lasted a few weeks. She still invades the radio every so often, but these days seems to spend most of her time posting scribbles in varied coloured fonts of ever increasing size over at her rant-fest on the Internet.)

Then, the Independent - suddenly and inexplicably - stopped running her columns. On top of that, the Indy printed a letter by a retired CBC journalist that attacked her pretty savagely. We are talking slagged, big time, with the focus on her lack of credibility.

Now you have to appreciate that "hydro-queen" used to be the darling of the Indy under editor Ryan Cleary. She helped him put together the farcial "balance sheet" on Confederation. "Hydro-queen" even worked on the story that garnered so much of Dan The Man's ire, the one that talked about the Premier's personal charity - but said nothing much at the end of it because the research sucked.

Hmmmmm.

Maybe we can explain the second one. And it isn't because the research suddenly sucked; that's a constant.

Dan The Man gets his knee-britches in a knot and boycotts the Indy over a piece Ryan's fountain of misinformation helped put together. (The boycott is only for Danny and his personal publicist; other ministers still talk to Ryan and the crew.)

But then the researcher gets the flick after Dan's tirade and certainly after the initial complaints about the charity piece.

And then last week, not one but two columns tried to plant the senior editorial lips at the Indy squarely back on Dan The man's hindmost regions. The subject? Why Max Ruelokke of course. What better way to ingratiate oneself with The Man at the moment.

From "The Fighting Newfoundlander":

"Just because it's the law doesn't make it right. Not from where Newfoundland and Labrador stands anyway..."
"That process was followed to the letter - at least according to Halley. Again, that doesn't make the law right..."
"Fight the ruling until either he [Williams] wins, the federal government backs down and allows Andy to serve beside Ruelokke or the law is changed to suit our purposes"
"I'm a fan of Danny boy, in case that wasn't obvious..."

If we didn't know any better, we'd swear the Indy was still getting ~~copy~~ e-mails from the Premier's publicity department; they couldn't have written that any better.

And actually, Ryan the depth of your affection for the prime ministerial posterior is painfully obvious, but the comment didn't fit in the middle of the Ruelokke piece unless someone was really smarting over being rejected by one's fantasy and wanted to suck up...again.

Then there's the entire column by Ivan Morgan on the same subject which is built in some places on pure fabrication. It struggles to kiss both cheeks on pure invention.

But - and this is the big but - they both fall lock-step into line behind Danny Williams.

And the source of all wisdom at the Indy?

She's persona non grata after Dan The Man took exception.

Apparently.

So what's up with that?

There is polling and then there is the stuff done by the guy featured in this excerpt from Penn & Teller's cable television show Bullshit!.

Be warned, the language in this piece is strong, but the guy at the focus of this piece is not so much a pollster as a fairly typical political consultant you come across in the United States.

And contrary to what he claims, it is manipulation.

During the Second World War, both Disney and Warner Brothers produced animated films for public entertainment and training.

In addition to cartoons featuring the Warner Brothers stable of characters like Bugs Bunny and Daffy Duck was a batch of 25 short films centred on a character named Private Snafu. Warner Brothers produced the shorts, but the Snafu character came from the fertile imagination of Theodore Geisel, known to generations of post-war kids as Dr. Seuss. Geisel spent the war working for the Armed Forces Motion Picture Unit under Colonel Frank Capra.

Snafu was a bumbling soldier who taught soldiers the right way of things by being so consistently wrong. He did it with humour and, as with the most famous American propaganda film Why we fight, they were effective. SNAFU is actually a well-known soldiers' acronym for military life. "It is short for "situation normal, all f**ked up." SNAFU is a close kin to FUBAR - "f**ked up beyond all recognition - and TARFU - Things are really f**ked up.

For your enjoyment on a summer Friday is Snafuperman, originally released in 1944:

And Spies, from 1943:

Local radio call-show host Bill Rowe seemed unduly sensitive this afternoon as local pundit-of-all-trades Simon Lono pointed out, among other things, that a current down-turn in the local housing market is directly attributable to the Premier's decision on Hebron.

Rowe, who worked for Danny Williams in Ottawa less than a year and a half ago, seemed genuinely uncomfortable with the remarks that obviously challenged the official line coming from the Premier's Office.

"So what's your point?" sneered Rowe is the unwarrantedly condescending way he has of treating some callers. Lono made the point several times. That included walking on Rowe several times as the Premier's former ambassador to OC-Transpo tried to butt in, in order to offer the view that everything was fine and that everyone supported Danny Williams knowing the financial repercussions.

But why was Bill so rattled by Lono? And why did the local callers orchestrated by the Premier's Office go into overdrive today specifically to attack Lono personally?

Well, the answer may lie in innovation minister Trevor Taylor's allusions earlier in the day to wannabe politicians on the airwaves.

Maybe the Danny machine is worried Lono will run in Signal Hill-Quidi Vidi and offer yet another candidate to run against the one Danny is trying to anoint. There's no secret that here at Bond Papers, we'd back the experienced, articulate Lono. His sharp tongue would make short media work of inexperienced, hand-picked candidates or even old hands at the bar for that matter. His frank talk would make a refreshing change from the orchestrated palaver - the word of the week - we get from politicians these days.

Danny-backers might want to be careful what they wish for.

Well, at least who seems to be able to call it correctly for you?

While we are a long way from Telly Savalas, seems the shortage of follicles at Bond Papers allows for a clearer vision on some issues.

1. Thought there was something fishy about that guy:

The federal Conservative commitment on fisheries issues like custodial management. Now the whole idea may be a crock, anyway, but the current fish minister in Ottawa campaign long and hard about the whole issue before he went into cabinet.

While only some people were too busy riding the Connie campaign bus to notice Loyola Hearn's hypocrisy, regular readers of the Bond papers were given a simple set of reports - back in January - as Loyola Hearn's party and then Loyola himself abandoned his pre-election posture.

We did it during the election and we reminded you at every juncture since just how much Minister Hearn sounded like his predecessor.

2. Federal presence really means my presence in a federal ministers office.

How times change.

Public servants were griping about cuts to federal jobs in the province.

The Harris Centre at Memorial University issued a "study" on federal presence during the election and promised a second report in February 2006.

Loyola Hearn and Norm Doyle - indeed all the Connies - harped on about how the evil Liberals had taken away the province's fair share of federal and promised to do things differently.

Then the election came and Loyola went to cabinet.

Now, federal public servants are worried about job cuts.

There's no sign of the Harris Centre's second "study".

And Loyola?

Well, he said the day after the election that the whole thing about federal presence was a bit of a crock anyway.

3. Papers, please.

During the election Connie supporters - including the candidates themselves - dismissed comments that drew attention to the plank in their platform about rapid execution of deportation orders.

They chimed in to criticise the evil Liberals about the Portnoys.

Well, the rapid deportation order thing was real.

And, as for Loyola, he is still pussy-footing around, trying to line up a tango with his buddy Norm Doyle so they won't have to be seen to back their party - yet again - and go against what is politically popular in their ridings.

Now let's be clear. The Portnoys should be deported for a whole bunch of good reasons. And let's not forget that if it were not for political interference in the case by politicians from all parties, the poor family wouldn't be holed up in a church basement in Marystown.

So with those three examples under your belt, let's ask the question:

Who loves ya, baby?

Not the guys who constantly jerk you around saying one thing before an election and another thing afterward.

The Usual Crowd have been bleating the past few days about a set of facts dealing with foreign overfishing that were on the federal fish department's website.

TUC was bothered because facts were being presented, versus the palaver they usually spread around on radio call-in shows.

Anyway, the piece - Overfishing Myths and Realities - is still on the site. It just got moved to the backgrounder archives.

You can find it by heading to dfo-mpo.gc.ca, clicking through to the English or French version of the site and then looking for "Archives" under the vertical banner on the right hand side that is headed "Find Info On...".

Nice to see the facts stay around and aren't being removed because of agitation by misinformed myth-mongers.

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